On Monday morning in Asia, the largest cryptocurrency surged 1.8 percent to $30,450. According to Bloomberg data, it had been down for seven weeks in a row, the longest losing trend since August 2011. This mirrored the S&P 500’s seven-week fall.
“If the S&P falls some more, that should create one final flush and a great buying opportunity for Bitcoin,” Fundstrat Global technical strategist Mark Newton said. “There’s a lot of bearishness, and we should be approaching a time when you want to buy into that in the next couple of months.”
Bitcoin has struggled in recent weeks as the Federal Reserve hikes interest rates and inflation remains high, boosting prospects for more monetary tightening. While the token has been touted as a hedge against inflation, it’s proved in recent months to be highly correlated with risk assets like companies in the Nasdaq 100, which has tumbled amid the changing regime.
“Bitcoin is likely to hover around $29,000 to $31,000 for the next couple of weeks,” said Noelle Acheson and Konrad Laesser of Genesis Global Trading in a note Friday. They added that some economic-data releases, like US gross domestic product or inflation measures, “could change the narrative.”
Rick Bensignor, president of Bensignor Investment Strategies and a former Morgan Stanley strategist, uses DeMark technical indicators, which compare the most recent maximum and minimum prices to the previous period’s equivalent price to measure demand and argue Bitcoin likely won’t break higher anytime soon.
“I’d still expect another four weeks of heaviness,” he said in a note Monday. The May 12 low was around $25,425 and the bounce from that keeps support intact at $28,900, he said.
